Audi will expand VW, Porsche collaboration

Audi CEO Bram Schot wants to restore the brand’s technological cachet by switching an existing model line to battery power.

Audi will expand its collaboration with sister brands Volkswagen and Porsche to help lift its returns within 18 to 24 months, its CEO said. The VW Group premium brand aims to trim costs, increases efficiencies and renews its focus on China.

“We can get better synergies out of the group,” Audi CEO Bram Schot said in a Bloomberg TV interview ahead of the Geneva auto show.

In the next 2 years Audi will offer five full-electric and seven plug-in hybrid cars. The CEO also wants to restore the brand’s technological cachet by switching an existing model line to battery power. He declined to share details on which model line it would be because he wants to “surprise competitors.”

Since taking over as CEO after the arrest of his predecessor, Rupert Stadler, Schot has widened an efficiency push at VW Group’s largest profit contributor. The brand accounted for 28 percent of VW Group’s operating profit before special items in the first nine months of 2018.

To maintain that level of contribution, Schot aims to save 15 billion euros ($17 billion) at Audi by 2022. This will happen while he simultaneously orchestrates a broader shake-up to keep Audi from falling further behind luxury rivals Mercedes-Benz and BMW Group. Audi was the world’s second-largest global premium automaker until it was passed by Mercedes-Benz in 2015. Audi has remained in third place while Mercedes has also overtaken BMW to become the world’s top-selling premium automaker.

Audi plans to ax about one-third of its engine variants, cull its bloated management ranks and avoid expensive night shifts at its main German plant in Ingolstadt.

Schot sees potential for market share gains in China despite a broader slowdown that could drag continue because of tension between the world’s largest car market and the United States. Schot views higher U.S. tariffs as potential challenge, not a threat, and says “we will manage.”

VW Group CEO Herbert Diess, who is also Audi supervisory board chairman, told Bloomberg TV last month that he is confident Audi’s new management team has the right strategy in place. He cautioned, however, about the challenges that loom in 2019.

Audi unveiled the full-electric Q4 e-tron design concept in Geneva as it seeks to boosts its lineup of low-emissions models to help meet stricter clean air rules. Plug-in hybrids versions of the Q5 crossover, A6, A7 Sportback and A8 flagship sedan will also be on display.

Schot said Audi is also considering a hybrid version of the Q8 crossover.